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http://www.insanely-great.com/news.php?id=1045
Apple squeezing some EU dealers
By ron carlson, Insanely Great Mac
October 2nd 2002
In an effort to benefit dedicated, Mac dealers the mothership is realigning product
margins
Macworld UK reports that Apple Europe, in what the company describes as an effort to
boost overall market share, is reducing the profit margin unauthorized dealers receive
whereas dealers with strong sales and after-sales service will continue to enjoy the
higher mark ups.
For example, according to Macworld, unauthorised independent dealers can now expect
basic margins of 1 or 2 percent (�13, $20) on an entry-level Power Mac. This compares
to an average basic margin of about 7 percent before the change.
Here in Taiwan, Apple has long had a price discrimination policy. However, dealers
here can earn higher margins if they buy Macs in large lots. For example, purchasing a
single entry-level PowerMac from Apple Taiwan effectively yields a margin of percent
(NT$1,500, $43) and those dealers able to buy in quantity (usually chain stores) can
expect at least double the margin.
As is the case here in Taiwan, it's likely that those looked upon with favor in Europe
by Apple will use the extra margin to cut prices for users, which forces smaller
and/or unauthorized dealers out of the game.
A high-street dealer offering custom-built solutions with strong sales and after-sales
support will enjoy �significantly higher margins� Apple UK managing director Mark
Rogers told Macworld. He revealed that other factors include location, staff-training
levels, demo facilities and third-party products in stock.
Editor's note: Once again, Apple is forcing dealers to sink or swim, and many of the
smaller, more marginal resellers will either be unable to survive on such slim
pickings or they won't get the sales at all as volume sellers corner the market. One
way for smaller dealers to get ahead is by forming cooperatives to purchase in volume
and pool their services/resources. This does, however, remove one's independence --
one of the basic reasons many a one-man-shop started in the first place.
Will Apple extend this pricing structure to other countries/regions? I would hope not.
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